The analysis company’s Commodities at Sea monitoring also recorded outbound oil and product flows averaging about 20.4 million barrels per day in February to date, slightly below January levels—evidence that geopolitical tension alone can slow shipments before any physical disruption occurs.
“Hormuz risk is not only about closure but also fleet productivity. If Iran escalates by seizing tankers or using drones to threaten commercial traffic, voyage times and possibly costs for Middle East oil exports would further increase,” S&P Global CERA analysts said.
Multiple shipping companies have already reported that they are avoiding the Strait of Hormuz and expect delays and rescheduling of shipments.
What Would Closing the Strait Mean?
There is no alternative export system at comparable scale. Saudi Arabia and the UAE operate bypass pipelines, but these cover only a portion of Gulf flows, while Iraq, Kuwait, and Qatar lack meaningful alternatives.
If the strait formally closed, most oil exports from the Gulf would be cut off from the world almost immediately. Even if Saudi Arabia and the UAE pushed their alternative pipelines to the limit, analysts say about two-thirds of Gulf exports would still be stuck.
LNG markets would also be hit. Qatar, the world’s largest exporter of liquefied natural gas—a super-cooled form of natural gas shipped by tanker—depends almost entirely on the Strait of Hormuz to export its fuel.
If the route were blocked, Asian buyers could lose their key suppliers within days. Asian economies such as Japan, South Korea, China, and India depend heavily on imported LNG to generate electricity.
Getting oil from elsewhere, like the Atlantic, would mean longer shipping times and higher costs, potentially pushing prices even higher.
How It Could Affect Consumers
Historical modeling suggests that sudden loss of Gulf supply could push oil prices sharply higher.
If that happens, the effects would likely reach global consumers quickly: higher gas prices, more expensive airline tickets, and rising transport costs that feed into the price of food and goods.
Financial markets typically react even before physical shortages appear, with oil futures climbing rising, transport-sector equities weakening, and currencies of major energy exporters strengthening as traders price in the risk of disruption.
Strategic petroleum reserves could moderate the shock, but releases take time and cannot fully substitute for Gulf crude grades.
Inside the Gulf, stopping exports would quickly strain government finances. Countries such as Iraq, Kuwait, and Qatar rely heavily on oil revenues to fund public spending. If shipments halted, storage facilities could fill rapidly, forcing producers to cut output and lose income.
Shipping effects would extend beyond oil. Tanker rerouting, insurance repricing, and naval risk zones tend to raise freight rates across bulk commodities and container shipping, impacting worldwide logistics.
This story originally appeared on WIRED Middle East.
